BMI View: Ghana's construction sector will enter a recession in 2015, before a slow recovery from 2016. Mounting headwinds from high inflation, currency weakness, deteriorating fiscal position and the systemic power crisis have converged to place significant downward pressure on construction activity. Toward s the latter end of our forecast (2020-2024) we anticipate strong growth to return as Ghana remains a fundamentally attractive infrastructure market.
Global and domestic pressures are weighing on Ghana's construction sector. Government expenditure has been largely directed to wages over fixed investment, and with a deteriorating fiscal position we do not anticipate an expansion in government infrastructure investment. This situation has only been exacerbated by currency weakness, which has increased the cost of servicing dollar demoninated debt. At the same time, while the government plans a USD1.5bn Eurobond in H215, rising yields will make this more expensive and it could potentially be delayed. Companies are also struggling to sustain activity as the power crisis weighs on productivity and raises costs owing to the need for generators and the cost of building materials: cement companies are struggling to sustain production due to load shedding. Both these factors combined with currency weakness are contributing to soaring inflation - with construction sector inflation hitting 75% in Q115.
With these pressures expected to be sustained in 2016, we have further downgraded growth and now expect a recession in construction industry value (-3%) in 2015 and a slow recovery in 2016 (2.1%).
Despite these headwinds, Ghana remains an attractive market for infrastructure investment. A good pipeline of projects, improving PPP market outlook and strong domestic demand for infrastructure should see sector growth accelerate during 2020-2024, with average real growth of 7.2% anticipated.
Key Trends And Developments
Airports remain a key focus of infrastructure...
The Ghana Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Ghana Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Ghanaian infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Ghana to test other views - a key input for successful budgetary and planning in the Ghanaian infrastructure market.
- Target business opportunities and risks in the Ghanaian infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Ghana.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.